University of Piraeus. International Strategic Management Association
Abstract
The purpose of this study is to examine the market’s reaction to the announcement
foreign direct investment in Eastern Europe for firms from various
Western European countries and from Japan during the first merge wave
after the Berlin Wall removal. The results indicated that there is either an insignificant
negative reaction, or no consistent significant reaction to the announcements
of joint ventures or direct foreign investment. U.S.S.R. seems to
be the most risky of the target countries. The present conditions of uncertainty
and high political economic risk appear to offset any favourable effects. The
results may be period specific since there was an unusually high level of uncertainty
surrounding the removal of the Wall.peer-reviewe
